ANALYSIS: Confidence in PR is low for business journalists

It is hardly a secret among less idealistic PROs that journalists regard them as gatekeepers barring access to the truth, rather than facilitators on the path to enlightenment.

Many then, will regard the findings of a new MORI poll of business journalists - which rated PR agencies near the bottom of the table in terms of usefulness - with a sigh of resignation.

In the poll, carried out in June and July, agencies were rated a less useful source of information than both telephone conversations with company officials (not PROs), and in-house press officers. Their usefulness to business reporters is on a par with press releases, articles in rival media, brokerage and investment houses and news agencies. Agencies crept in just above websites and annual reports.

Yet only a year before, agencies had topped the usefulness list. Telephone and personal interviews with company executives came in at third and fourth respectively.

Unsurprisingly, perhaps, several senior financial PROs were initially dismissive of the findings - 'the world hasn't changed that much in a year' said one. Another said the sample pool of 37 was unrepresentative - though many more believed it was a large number drawn from a small pool.

Yet it is hard to explain a drop from first to seventh place merely in terms of statistical anomalies. Besides, agency bosses and business journalists are essentially agreed that MORI has identified a trend. If so, it has less to do with falling standards than it has to do with the current economic and regulatory climate.

Observer business editor Frank Kane says: 'Financial PR agencies tend to come into their own when there's a lot of M&A activity and IPOs. We've seen almost none of that for 18 months.'

It isn't that agencies are doing anything wrong, Kane says - and good financial PR will remain invaluable - it's just that there is less for them to do.

City agency bosses agree. One high ranking City figure points out that when the available business stories tend to concern 'sacking of CEOs, corporate rescues, redundancies and profit warnings,' agencies are less likely to work to ensure journalists are getting their fill of news.

Another adds that cuts in corporate spending on PR meant very often agencies would find their client bases thinning, resulting in a perception of declining importance.

PRCA vice-chairman Tom Watson adds that it's only natural that journalists will want to go straight to senior executives for comment when the stories concern newsworthy turmoil and that firms fail to recognise this at their peril.

'In-house people offer the most direct route to the chief executive - that could explain why they have risen up the rankings,' he adds.

Another important factor that could explain why agencies have fallen down the rankings was raised by Sundeep Tucker, editor of The Financial Times Observer column. He points to the regulatory changes introduced by the Financial Services Authority in January, which impose severe restrictions (and swinging penalties) on disclosure of information by firms (and their agents) to sources other than the Stock Exchange.

As has been documented elsewhere, the rules mean that where once PROs might have quietly passed news of a deal to a friendly paper, they would now be reluctant to fall foul of the FSA.

Tucker says: 'The old Friday night drop, where agencies would channel M&A stories to the Sunday business editors just doesn't happen anymore.'

Agency bosses say the situation is made worse by the ambiguity of the rules. At the same time many believe the anxiety surrounding the FSA will recede as the scope of the crackdown becomes clear. Kane says fears that a high-profile test case would be launched to make an example of an offender haven't materialised yet, for example.

There could be other factors at work. Kane believes a new generation of journalist has emerged which has an innate distrust of PR - believing political spin to have infected the world of financial communications.

Positive Profile director Jonathan Rush add that growing time pressures on journalists, may mean they have less time to meet PROs than before and are more likely to go straight to senior management.

Some make the point that financial PR is no popularity contest and that journalists inevitably find CEOs more useful than PR agencies. The first responsibility of the PRO is to the client and the duty to the journalist is to help them get the story right and see it from the client's point of view, rather than get what they want - which may be price-sensitive information or the kind of indiscretion that wrecks deals, says one City insider.

Ultimately, says Watson, most financial PROs would see themselves as neither the most nor least useful source of information by journalists, but as something in between.

And at least financial PROs can take consolation from the fact that when the economy improves and the regulatory dust settles, they will come to be loved a little more.